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The Critical Role of Email Risk Scoring in Fraud Prevention

Fraud leaders are pulled between two tensions: preventing fraud and supporting the friction-less transaction experiences consumers demand today. To achieve this, fraud teams need dynamic, global tools that evolve as fast as fraud tactics. This article will provide background on why the dynamic tool you need to put at the center of your fraud prevention strategy is staring right at you: the email address.

The critical role of email risk scoring in fraud prevention

The email address is the global common denominator for doing business online. Whether it’s a new bank account, credit card application, social media account or any type of purchase, an email address is part of the process. According to Statista, email usage is predicted to grow by 2 to 3% each year from 2018 to 2023.

Over 92% of emails in our network are personal. (Why? Consumers prefer using email accounts under their control. Corporate accounts are tied to jobs, which change.)

These trends represent why email is the logical front-end fraud prevention layer. Every time an email address is used, it leaves a trace. Over time, those traces unveil patterns of behavior. This story can be examined to assess the risk present in every transaction. Our approach with LexisNexis Emailage offers less friction than other methods (such as manual review) of determining whether a transaction is a fraudulent attempt or legitimate customer.

The biggest challenge facing companies isn’t necessarily online fraud. Instead, it’s maintaining the delicate balance between deterring fraudsters and delivering seamless customer experiences.

Content Summary

Introduction: The most underused variable in fraud prevention
How does email risk scoring work?
The power of fighting network-to-network
How Emailage drives ROI by identifying high-risk transactions
The critical role of Emailage in approving more transactions
How Emailage drives ROI by identifying low-risk transactions
How Emailage drives ROI by optimizing manual review
An overview of use cases
The Emailage impact

Introduction: The most underused variable in fraud prevention

When was the last time you were able to do anything online without an email address required at some point in the process? When was the last time you worked at a company that didn’t collect email addresses in some form or another?

Most companies view the email address as only useful for things like customer notifications and marketing campaigns. But we know it is capable of so much more.

How does email risk scoring work?

Emailage goes beyond static data and illuminates the person behind a transaction using IP address, email and additional static and dynamic information to validate identity and accurately assess risk.

Many fraud prevention tools only analyze standard transaction data such as name or address. These are easy for fraudsters to trick, reverse-engineer, evolve and innovate around. But fraudsters use email addresses in ways which fall into patterns that are identifiable, based on velocity and structure.

Compared to data such as names and addresses, emails always fall into the pattern of username, “@” sign and domain name.

Here are just a few of the unique data points email addresses provide and how they can work for you:

  • Name Matching: In general, email addresses have a name associated with them. This name information provides an easy-to-compare data point to stop risky or fraudulent transactions.
  • Domain Information: Domain names are an integral part of an email address. By researching the domain information, a business may identify: the age of the registration, the registrar, name of the registrant, street address and the email associated with the domain registration.

The email address provides an enormous amount of behavior and history that is perfect for fraud detection and prevention.

In most cases, an email address alone is not considered personally identifying information (PII). Because PII laws limit what certain organizations can use for fraud detection, it is safer for organizations to use an email address versus more sensitive data. Plus, users can choose any combination of numbers or letters when creating their email address. This means an email address is not intrinsically tied to a person’s identity, and businesses will not need to go through additional legal review to use email as part of their risk engine.

The power of fighting network-to-network

Fraudsters have no regard for industry or region. The only way to stop them is with the power of a combined network.

Our global email risk intelligence has 96% coverage of email addresses worldwide, as well as the history and behavior associated with email and IP addresses.

Utilizing positive and negative behaviors, along with network intelligence, paints a full picture of a transaction’s risk profile. This also enables for real-time tracking of trends which allows for greater certainty in decisioning

There are other methods to verify identity. However, if your company operates globally, these methods have limitations or may not even be available. Unlike a physical address, driver’s license or even phone number, the email address works globally.

It makes sense: Is your phone number global? No, there are different carriers in different countries and it’s not necessarily a unique identifier. How about device ID? Device changes are far more frequent than email address changes. These methods don’t offer the same opportunity for scale as using the email address or the ability to illuminate a pattern of behavior over a long period of time.

How Emailage drives ROI by identifying high-risk transactions

Utilizing non-transaction data gives fraud prevention teams additional intelligence to make confident risk decisions. This is achieved with additional information like, if the email account is active and valid, its tenure, ownership and previous transaction behavior.

Using this information as a front-end layer of security empowers fraud leaders with intelligence for accurate risk decisioning.

Chargebacks/Fraud Losses: Reducing chargeback losses. Ability to reduce up to 50% of all chargebacks.

Customer Success Example: An online electronics merchant saves $500K in fraud prevented a month.

Process Improvement: Optimize your manual review queue using Emailage with custom rules to streamline workflows so good customers have a seamless experience, and the riskiest transactions are automatically stopped for verification and manual review.

Customer Success Example: An online gaming retailer was able to triple their efficiency when looking at cases.

91% of email users have the same email address for at least three years, and 51% of email users have the same email address for over 10 years.

The critical role of Emailage in approving more transactions

Emailage helps capture revenue by approving more transactions that might have otherwise been sent to manual review.

According to industry research, nearly one-in-four orders are manually reviewed. The study also found that merchants reported accepting 82% of orders after the review, which indicates that more orders are being reviewed than necessary.

Emailage’s approach to machine learning enables users to leverage custom rules so only truly risky transactions require review. These rules are designed to improve over time, increasing in accuracy as you share fraud events, and rules are continually fine-tuned for your region, industry and your business. Then, you can optimize manual review sending the highest-risk transactions.

Examples include:

  • Links to known fraud events
  • High-risk domains and locations
  • Segmentation of emails with risky behaviors

Your business already captures email address information for transactions and engagement. Use it to effectively deter fraud and deliver seamless experiences to your customers.

Bottom Line: Emailage simplifies fraud prevention. You can save money by using the right fraud signals and grow your business by removing friction from customer experiences.

How Emailage drives ROI by identifying low-risk transactions

New Revenue: Low fraud scores allow fraud teams to approve more transactions upfront. This includes thousands of cases that may have been declined or stopped for manual review. The result is increased revenue with minimum fraud exposure.

Customer Success Example: The largest airline in Spain is now approving €3 million/month.

Customer Experience: Allow orders to be processed in more seamless ways, driving increased customer satisfaction and retention.

Customer Success Example: A video game retailer now approves 30 new customers each day who would have been declined using previous controls.

Optimization: Scale your business.

Customer Success Example: A global eCommerce merchant reduced the number of cases sent to manual review by over 50%, while reducing fraud losses by 40%.

New Lines of Business: Spur business growth by expanding into new markets.

Customer Success Example: A large wholesale retailer reduced risk and enabled a new line of business in selling iTunes gift cards.

How Emailage drives ROI by optimizing manual review

Optimization: Automate workflows and processes, so only the riskiest transactions are moved to manual review.

Speed: Review cases faster.

Accuracy: Make confident risk decisions, reduce errors and improve overall scoring.

Efficiency: Reduce the percent of cases sent to manual review, which could lead to saving significant amounts of time for your fraud analysts.

Time to review 1 case (industry average) 5 minutes
Cases reviewed per day (6 hours worked = 360 minutes, 5 minutes each case) 72
Cases Per Month 1,620
Cases Per Year 19,440
10% Reduction 1,944
162 Total Hours Saved 7 Total Days Saved

78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience.

An overview of use cases

New Account Fraud: See the person behind the application with email, IP address and transaction history.

Card-not-pressent (CNP) Transactions: Identify risk with CNP transactions to reduce chargebacks and more quickly approve low-risk transactions.

Digital goods and money transfers: Verify buyer and sender identities before goods have been issued or money is transferred.

Account Maintenance: Protect customers from account takeover by evaluating the fraud risk of changes to the email addresses.

Manual Review: Optimize the manual review process by enabling faster, more confident risk decisions.

Industries served:

  • Airlines and Online Travel
  • eCommerce and Retail
  • Banking, Finance and Lending
  • Digital Goods and Money Transfers
  • Ticketing
  • Technology

The Emailage impact

  • 277 billion global data points analyzed
  • 8.2 million confirmed fraud emails shared
  • 22,500 fraud emails shared daily
  • Processed transactions in 150+ countries by IP address
  • Prevented $4.5 billion of fraud globally
  • 95% of customers surveyed would recommend Emailage
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